Bizarre mill-sharing deal proves too close for comfort

By Coran Lill

Friday 20th August 2004

A bizarre business arrangement between Carter Holt Harvey and Norske Skog at the Tasman pulp and paper mill in Kawerau has become the focus of union wrangling and complex litigation.

Moves by Carter Holt to extract itself from at least two long-standing joint venture agreements with Norske which could see at least a dozen Norske jobs axed have led to protracted court-directed negotiations between the parties in Auckland this week.

The unusual mill at Kawerau the Tasman mill houses both Carter Holt and Norske operations on the same site. The strange situation arose when Norske sold off its pulp manufacturing business to Carter Holt for $311 million in March 2001 but retained its paper business.

The two companies have a close economic working relationship but operate separate entities and employ their own staff.

Under a series of joint venture agreements, Norske provides a number of services to Carter Holt but now it seems the relationship is too close for comfort.

The unravelling saga began last month when attempts by the pulp and paper arm of the Manufacturing & Construction Workers' Union to organise an early morning stopwork meeting to discuss Carter Holt's intentions backfired resulting in a late night Employment Court injunction preventing Carter Holt employees attending the meeting.

But the employees went anyway, arguing that simultaneous strike action by Norske employees, who provide emergency services to Carter Holt under one of the joint venture agreements, put their workplace health and safety at risk.

Whether they can lawfully strike on health and safety grounds is fiercely contested by Carter Holt, which says contingency plans will protect its employees.

The agreements with Norske that Carter Holt has signalled it wants out of relate to a vital wood processing agreement and a "millwide services" agreement essentially the transporting of material across the factory floor.

These are carried out by Norske employees for both Norske and Carter Holt operations at the mill but Carter Holt has signalled it wishes to have these services provided by independent local businesses instead.

The union now alleges Carter Holt has an employment-type relationship with the potentially affected Norske employees and therefore a duty to consult with the affected employees something Carter Holt denies and an issue that has been at the centre of a four-day mediation between the parties this week.

Meanwhile, an attempt by union members employed by Norske Skog to strike has also been injuncted and is the subject of negotiations between the parties.

At presstime, Norske, Carter Holt and the union were in negotiations and either had no comment while the matter was before the court or had not returned calls.

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